Book Review: The Motley Fool’s rule breakers, rule makers

I am a big fan of fool.com. Their articles and books are very easy to understand and provide great analogies. I have taken their advice [through their stock recommendations in their articles] in the past and did find some great stocks i would not have known otherwise. These guys are local too and are headquartered in Alexandria.

This book is set in 99 and i am not sure if Fool brothers wanted to try something different with this book or maybe wanted a new style in their writing. From what i remember, Young fool – David Gardner – is an English major and this book shows it all. He tried to use all his English literature Shakespearean knowledge on us, but that, unfortunately, didn’t sit well with yours truly. I was surprised by the complexity of the point the book was trying to make and had to go and re-read some of the topics in trying to look for a word that i understood. I had to skim through some poetry just to stay awake with the book.

The book is divided into two parts : First part is Rule Breakers section attributed by David where he defines what constitutes a Rule Breaker company and how owning one of them could do wonders for your portfolio. The ground rules for finding one were very clearly laid out, despite the poetry part, and had an impressive backing with the examples, as always in Fool Books. Their examples make the fundamentals clear.

The Other part [almost half the book] is written by the elder brother -Tom- who takes us deep into finding the rule makers , the rule breaker guys who have turned into rule makers now and can print money without losing their stability status. Tom’s part was very enjoyable with pages going by quickly, loaded with examples and some simple concepts that i got to learn [you will see them in my notes below].

Although the book makes it very clear, to reiterate, roughly in my language, the fools tried to say that you should own a small chunk of your portfolio for Rool Breaker companies depending on your risk-level and then have a bulk of your portfolio for Rule Makers.

My notes:

1) This book is the second book that talked about Columbus’s funding story for expeditions.

2) Look for Top Dog and first-mover in an important and emerging industry. Read this again. e.g. Amazon

3) Ask yourself over and over again what will happen if this company were to tank today? Would anyone care? Would everyone care? e.g. Amazon vs Whole Foods